New National Living Wage to boost living standards

The government is reminding employers that a new National Living Wage (NLW) is being introduced from 1 April 2016 and advising employers to get ready for this change.

The NLW rate will be payable to workers in the UK who are 25 or over. For workers currently being paid the National Minimum Wage (NMW) this will mean a 50 pence increase in their hourly earnings.

The government expects over a million workers in the UK aged 25 and over to directly benefit from the increase, which sees the current minimum rate of £6.70 increase by 50p. Many will see their pay packets rise by up to £900 a year.

Business Secretary Sajid Javid said:

'The government believes that Britain deserves a pay rise and our new National Living Wage will give a direct boost to over a million people. We are building a more productive Britain and giving families the security of well-paid work.

This is a step up for working people, so it is important workers know their rights and that employers pay the new £7.20 from April 1 this year.'

The government has launched an advertising campaign to highlight the new wage. More details are available at: livingwage.gov.uk.

The government is encouraging employers to ensure they are ready to pay the new wage on 1 April 2016. As part of this, it has published a four-step guide for businesses on the living wage website, asking employers to:

Check you know who is eligible in your organisation.

Take the appropriate payroll action.

Let your staff know about their new pay rate.

Check your staff under 25 are earning at least the right rate of NMW.

HMRC will have responsibility for enforcing the new NLW in addition to the NMW.

For those not affected by the NLW the following NMW rates apply:

£6.70: for 21s and over

£5.30: for 18 to 20-year-olds

£3.87: for under 18s

£3.30: for apprentices (the rate applies to all apprentices in year 1 of an apprenticeship, and 16-18 year old apprentices in any year of an apprenticeship)